• by Kate Kaye , March 30, 2004

Guess who tops the search referral charts? It's Google, of course. The search engine king carries on its reign over Yahoo! and Microsoft Corp.'s MSN, according to a report released Tuesday by Web analytics firm WebSideStory.

Continuing its rise since 2001 when it accounted for just under 12 percent of the search referral market, Google.com hit an all-time high of almost 41 percent as of March 23, 2004. Yahoo.com, on the other hand, prolonged its ongoing descent from a 2001 high of nearly 37 percent to 27.4 percent this year. That's down from last year's 30.95 percent measurement. MSN.com logged mediocre growth, inching from 14.69 percent in 2001 to 19.57 percent in 2004. MSN is developing its own search product which executives say will be on the market within the next 12 months; the service current outsources paid listings to Yahoo!'s Overture.

"The trends are worse than what this report shows," says WebSideStory analyst Geoff Johnston, adding: "The U.S. is really Yahoo!'s strongest country." Although not included in this report, WebSideStory also measures search referrals from domains based in other countries. For example, in Germany, Google had a search referral percentage of more than 80 percent compared with Yahoo!'s 5.57 percent and MSN's 3.47 percent.

"This reinforces what everyone already knows," suggests Jupiter Research analyst Nate Elliott, with regard to the U.S. numbers. According to Elliott, although Google is just behind Yahoo! in its ability to attract users, it drives far more click-throughs because people use Google to perform more searches.

To Johnston, Google's ability to attract users for Web search purposes confirms its most favored technology status. "The superior technology is always going to win," he says. Alluding to Yahoo!'s previous usage of Google's search technology, he continues: "People liked the Google technology so much, they didn't have to go to Yahoo! to use it ... they decided to cut through the middle man."

WebSideStory's StatMarket search referral report measures the proportion of visitor traffic that search sites deliver to other Web sites. The company relies on data gathered on over 25 million unique browsers through its HBX site reporting and analysis tool. "The sample is gigantic and random," stresses Johnston. "The sample is not the sites, it's the people who happen to trip across the sites."

Referrals resulting from unpaid and paid search results listings and banner ads running on search engine sites are all tracked for the report. Although Yahoo! has acquired Overture, referrals from the Overture network are not included in Yahoo.com's referral percentages.

"Four years ago I would have said Yahoo! had it all wrapped up," admits Johnston. Now, he believes its search engine won't stage a comeback in terms of search referral market share, "if trends don't change dramatically." Yahoo! has placed significant emphasis on its search business lately by acquiring Overture, dumping Google's technology in favor of its own, and introducing local search features. MSN is also planning big changes to its search engine. "MSN is always the dark horse," Johnston maintains.

The WebSideStory report tells only part of the story, as far as Jupiter's Elliott is concerned. While it reveals that almost 88 percent of search referrals are driven through these top three sites, "marketers have to look at which search engines perform for them," Elliott contends.

Elliott admits that advertisers need to be on Google and Overture. However, since the majority of search marketers are looking to drive direct sales, they shouldn't disregard smaller search engines. "There are also shopping search engines that are much smaller but much more efficient at driving traffic back out to shopping sites," Elliott explains. "Advertisers should look at the number of users who also visit a particular commerce category. That story is the important story."